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Worker replacement and cost-benefit analysis of life-saving healthcare programs, a precautionary note
- Source :
- Health Economics, Policy and Law, Health Economics, Policy and Law, 2014, ⟨10.1017/S1744133113000352⟩, Health Economics, Policy and Law, Cambridge University Press (CUP), 2014, ⟨10.1017/S1744133113000352⟩, Health Economics, Policy and Law, Cambridge University Press (CUP), 2014, 〈10.1017/S1744133113000352〉
- Publication Year :
- 2014
- Publisher :
- HAL CCSD, 2014.
-
Abstract
- The assumption according to which ill individuals can be replaced at work that underpins the ‘friction cost method’ (FCM) to value productivity costs has been primarily discussed within the framework of cost-utility analysis. This paper investigates the consequences of this assumption for cost-benefit analysis (CBA). It makes three contributions. First, it provides the first analytical account of the overall consequences of ill worker replacement on social welfare and it analyzes the associated compensation effects within a CBA framework. Second, it highlights a double counting problem that arises when ill worker replacement is assumed in the CBA of life-saving health care programs. To the best of our knowledge, no satisfactory solution to this problem has yet been provided in the literature. Third, this paper suggests and discusses two original ways to address this double counting issue. One consists in adjusting value of a statistical life estimations for the well-being provided by future incomes. Another possibility lies in the estimation of marginal rates of substitution between health and wealth so as to directly monetize the value of life over and above consumption. We show that both solutions raise unresolved questions that should be addressed in future research to enable appropriate use of the FCM in CBA.
- Subjects :
- Employment
Social Welfare
Appropriate use
Efficiency, Organizational
03 medical and health sciences
0302 clinical medicine
Health care
Economics
Humans
[ SHS.ECO ] Humanities and Social Sciences/Economies and finances
030212 general & internal medicine
Life saving
Actuarial science
Cost–benefit analysis
business.industry
030503 health policy & services
Health Policy
cost-benefit analysis
friction cost method
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Double counting (accounting)
Models, Economic
8. Economic growth
Value of life
Quality-Adjusted Life Years
0305 other medical science
business
Subjects
Details
- Language :
- English
- ISSN :
- 17441331 and 1744134X
- Database :
- OpenAIRE
- Journal :
- Health Economics, Policy and Law, Health Economics, Policy and Law, 2014, ⟨10.1017/S1744133113000352⟩, Health Economics, Policy and Law, Cambridge University Press (CUP), 2014, ⟨10.1017/S1744133113000352⟩, Health Economics, Policy and Law, Cambridge University Press (CUP), 2014, 〈10.1017/S1744133113000352〉
- Accession number :
- edsair.doi.dedup.....f1e691246794d8dec148f398ccec2a0b